Maritime Update: Gold Does Not Satisfy Jones Act
On June 17, 2017, the Texas Supreme Court, in the case Helix Energy Solutions Group, Inc., et al. v. Kelvin Gold, reinstated a judgment in favor of a vessel owner against an employee seeking recovery under the Jones Act. This ruling clarifies that, in Texas, major overhauls that render a watercraft practically incapable of transportation are sufficient to remove the craft from "vessel in navigation" status.
Helix Energy Solutions Group, Inc. ("Helix") purchased the HELIX 534 ("534"), a drill ship, for $85 million to convert her into a well intervention ship. Helix expected the conversion to take six months, but it took 20 months and cost $115 million. The conversion involved, among other things, removing obsolete equipment, installing well intervention equipment and overhauling the engines, thrusters, generators and inline propulsion equipment. The work rendered the 534 unable to navigate on her own for a substantial portion of the conversion.
In November 2012, near the beginning of the project, Helix hired Kelvin Gold ("Gold") as an "able-bodied seaman." Gold's responsibility was to familiarize himself with the craft and assist with the overhaul (painting, cleaning, taking inventory, etc.). Gold served two alternate 28-day hitches between early December 2012 and March 2013, along with a partial hitch in late-April 2013. Gold suffered injuries while working on the 534 and sued Helix under the Jones Act for maintenance and cure, damages and punitive damages, claiming he was a "seaman."
To qualify as a seaman, Gold had to establish that he had a connection with a vessel in navigation that was substantial in terms of its duration and its nature. Helix denied the 534 was a vessel in navigation and moved to dismiss Gold's suit. The trial court agreed and Gold's suit was dismissed. Gold appealed.
The Court of Appeals reversed the ruling in favor of Helix finding that Helix failed to conclusively prove that the 534 was totally deactivated or out of service for an extended period of time before Gold's injury. The Court of Appeals held that a reasonable factfinder could determine, based on the 534's physical characteristics and activities, that the ship was designed to a practical degree for carrying people or things over water and the 534's use as a means of transportation on water was a practical possibility. Helix sought review by the Texas Supreme Court.
C. Texas Supreme Court
The Texas Supreme Court reversed and reinstated the trial court's judgment in favor of Helix. The Court held that the 534 was not a "vessel in navigation" during the course of its conversion. Major overhauls that render watercraft practically incapable of transportation are sufficient to remove a craft from "vessel in navigation" status. Because the undisputed facts conclusively established that the 534 was not a "vessel in navigation," Gold was not a seaman for purposes of the Jones Act and his claims were properly dismissed.
D. Why is this important?
- An employee hired as an "able-bodied seaman" for work on a vessel overhaul/conversion project may not be covered by the Jones Act.
- The nature, duration and extent of a vessel's repairs and/or conversion should be taken into account when evaluating potential Jones Act exposure.
- In many cases, there is no dispute that a vessel is in navigation, but be on the lookout for objective facts that establish that the vessel was removed from navigation, thereby negating seamen status.